BANGKOK : Thailand is offering a guarantee for loans for pickup trucks, a key segment of its car manufacturing industry, as it seeks to boost a flagging autos sector that saw production slump to a four-year low last year.
Thailand is Southeast Asia’s biggest autos production centre and an export base for top automakers like Toyota and Honda, but its auto shipments declined 8.8 per cent last year, when domestic sales plunged 26 per cent.
A major factor in the decline has been lack of access in Thailand to loans for pickup trucks, which typically account for a third of the country’s domestic auto sales. In recent years, just under half of Thailand’s autos output was sold locally.
In an announcement on Friday ahead of next week’s Bangkok International Motor Show, the government said it will offer a support package of 5 billion baht ($147.80 million) over a seven-year period.
“The programme will reduce risk and creative incentives for financial institutions to provide loans,” Deputy Finance Minister Paopoom Rojanasakul said, adding that it would boost pickup truck sales by 6,250 units.
The move is the latest support measure for an industry held back by tight credit conditions resulting from Thailand’s soaring household debt, which stood was 89.0 per cent of gross domestic product last year, among the highest ratios in Asia.
Autos output fell for an 18th consecutive month in January, plunging more than 24 per cent on a yearly basis to 107,103 vehicles.
Thailand is betting on electric vehicles investments to boost the auto industry and has recently attracted Chinese EV brands like BYD and Great Wall Motor, which have poured over $3 billion into the country.
The government has rolled out other policies including tax incentives for plug-in hybrids, while Japanese car manufacturers are proposing a trade-in and scrapping scheme, to help sales, Reuters reported last month.
($1 = 33.8000 baht)
